Exxon Mobil stock drops on refining profit warning

Investing.com -- Shares of Exxon Mobil Corporation (NYSE:XOM ) dropped 1.2% on Wednesday following the company's warning of a decline in refining profits for the fourth quarter.

The oil giant cited weak returns across its operations, which are part of a broader challenging environment for the industry marked by pricing pressure and demand volatility.

Exxon Mobil anticipates its fourth-quarter earnings to be approximately $1.75 billion lower than the previous quarter. This projected decline reflects the broader industry trend of reduced profitability due to a decrease in the refining of crude oil and the selling of petroleum products.

The conclusion of the post-pandemic demand surge and the launch of large-scale plants globally have also impacted refining margins negatively.

Comparing year-on-year performance, Exxon's profits in the third quarter saw a 5% decrease from the same period in the previous year, while its competitor Chevron (NYSE:CVX ) reported a more significant 21% drop.

"We expect similar trends as major oil peers publish trading updates - but none have the pending inflection in FcF that can support outsize dividend growth," analysts from Wolfe Research commented.

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Source: Investing.com